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The Duemilanove board itself has everything you need to program an Arduino. Just install the Arduino software on your computer.
But if the ATmega168 doesn't have the Arduino firmware installed, you'll have to use a different programing cable. The Duemilanove board has an ICSP connector (normally that's called ISP, maybe the builder uses PICs, too) for that. You'll need an ISP cable, the Arduino firmware for the ATmega168, and programmer software (AVRDUDE.)
If you want to use the programmed ATmega168 chip without the board, just program it first and remove it.

Like gmoon explained, the Duemilanove does have everything you need to program an ATmega168. You can use it to program any ATmega168 or ATmega328, pop the chip out of it, then run it with a bare minimum of components in a breadboard. Take a look at the "Rock Bottom Freeduino" available at http://wulfden.org/TheShoppe/freeduino/rbfk.shtml . Basically, it's just an ATmega168 chip with the Arduino boot loader loaded, a crystal, a switch, an three capacitors. You can plug these components into a solderless breadboard, add about five volts of electricity and it will run any program you loaded into using your Duemilanove. The price is right too - only $9 including shipping

what do i do when i need to program an ATmega168 without the Arduino? Is it possible to make a programming board at home with some freeware from the net and program it? Or is there any other easier method?

<p>Actually, with a very simple circuit connected to a PC serial port and free off-the-net software, you can easily program an ATmega168 on a solderless breadboard.</p><p>You can find the simple circuitry all over the web - i.e. <a href="http://www.olimex.com/dev/images/avr-pg1b-sch.gif">www.olimex.com/dev/images/avr-pg1b-sch.gif</a><br />or <a href="http://electronics-diy.com/avr_programmer.php">electronics-diy.com/avr_programmer.php</a><br />among others.<br /><br />Common software to use are PonyProg2000 - <a href="http://www.lancos.com/prog.html">www.lancos.com/prog.html</a><br />or AVRDUDE, which comes with the WinAVR compiler (if you're using Windows for your firmware development).<br /><br />Beware if you're trying to program an ATmega168<strong>P</strong> instead of an ATmega168 with PonyProg - it does not yet support the <strong>P</strong> version yet (or the bigger ATmega328P either - which AVRDUDE easily supports).</p><p> </p><p> </p>